Aliran urges Penang government to control pricing of low and medium-cost homes

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Contrast these homes to the expensive homes marketed abroad - Photograph: Choo Choy May/Malay Mail

Aliran strongly urges the Penang state government to intervene and disallow the current practice of certain developers adding extra costs to the base price of low-cost housing.

Aliran strongly urges the Penang state government to intervene and disallow the current practice of certain developers adding extra costs to the base price of low-cost housing.

The state government must ensure that developers do not charge beyond the ceiling price allowed for low and medium-cost homes.

The report by the Consumers Association of Penang (CAP) that some developers have been charging for add-ons such as car park space, tiling works and renovation packages is cause for much concern.

Apparently, a buyer of a low-cost house or apartment at a base price of RM42,000 may be required to fork out an extra RM70,000, bringing the total price to RM122,000 – and, in some instances, even more.

The CAP report also indicated that in one low-medium-cost development project in Tanjung Tokong, buyers had to pay an extra RM1,000 for each floor after the fifth floor and up to RM8,000 more for corner units. Such practices will certainly place a financial burden on buyers of low-cost housing who are mainly those from the bottom 40% of society.

A 2017 Bank Negara quarterly article highlighted the acute mismatch between the supply of high-end housing (RM250,000 and above) and the demand for genuinely affordable housing (RM150,000 and below).

Already, there is an oversupply of high-end homes: out of 146,497 homes in oversupply in the second quarter of 2017, 82% were priced above RM250,000. Meanwhile, there is insufficient supply to meet the demand for genuinely affordable housing.

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In simple terms, many Malaysians require housing but simply cannot afford what is available in the market.

Aliran notes the response of Penang State Housing Committee chairman Jagdeep Singh Deo including his statement that the ‘packages’ offered by developers are strictly optional.

But the fact that ‘renovation’ packages are on offer for new housing – and so many buyers feel they have to sign up for them – raises questions as to whether it points to the furnishing that is required or to the quality or standard of the housing being provided.

What is the duty of the state to clarify what these basic standards are and to oversee that these are complied with?

Aliran urges the Penang state government to take seriously the allegations of arm-twisting of buyers to take up the optional extras. Clearly those who seek to buy low-cost housing do so because of their limited means, and so to compel them to pay higher prices than necessary will definitely cause financial hardship.

Developers are already making lucrative profits from the sale of higher-end houses and condominiums. It is unethical to make a profit from those who can barely afford to buy housing at the low-cost prices.

Aliran reiterates the call to the state government to to prioritise the housing needs of the poor and needy in Penang.

Aliran executive committee

9 September 2019

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